AI disruption… really?

Legendary investor Peter Lynch advised people to invest in what they know. The idea here is that because customers know a product or service intimately, they have insights that others don’t.

With this in mind, I think Booking Holdings (NASDAQ:BKNG) looks attractive right now. This is the world’s leading online travel agency, with over 1.2bn room nights booked across its platforms last year. That was up 8% year on year.

I was a tiny part of that number, as I’ve been a loyal customer for a long time. So when I see the stock down 23% since last summer because investors worry AI might make the platform less relevant, I think to myself, ‘Really?’

Because the numbers remain very solid. In Q1, gross bookings grew 15%, or around 8% on a constant currency (CC) basis. Revenue was up 16% (10% CC) to $5.5bn, while room nights grew 6% despite a 2% hit from the Middle East conflict.

Admittedly, the company guided for a slowdown in Q2 — just 4%-6% growth in both gross bookings and revenue. However, this is due to the Iran war and disruptions in Middle Eastern inbound, outbound, and intra-region routes, rather than AI disruption.

And while management warns about inflationary pressures potentially hitting travel demand, it remained confident in April that business would pick up sharply in the second half. Booking expects high-single-digit revenue growth for the full year.

Looking further ahead, I expect Booking to maintain its leadership position, supported by its popular reward programme. It handles payments, refunds, and customer support, which AI agents are likely years away from doing reliably.

Right now, investors can pick up shares at just 17 times forward earnings, a significant discount. It’s worth noting that the super-profitable firm is also buying back shares aggressively, which should fuel strong future earnings per share growth.

Fitness boom

Sticking with Lynch’s invest-in-what-you-know philosophy, I want to flag Applied Nutrition (LSE:APN). This is an ambitious FTSE 250 company aiming to become the world’s most trusted and innovative sports nutrition, health and wellness brand.

The firm has been making solid progress towards that ambition, with multiple upgrades to full-year guidance. For FY26, which ends in July, revenue is expected to reach around £150m, up from £107m in FY25. That would represent 40% growth!

On top of this, Applied Nutrition’s profitable, boasting an impressive 27% operating margin.

The biggest risk here is high customer concentration in the shape of me! I just can’t get enough of its premium products, including ISO-XP whey protein isolate and the best-selling ABE pre-workout energy drink.

Observation aside, this is a competitive global market, so it isn’t guaranteed the firm will become a global leader. A marked slowdown in growth could hurt sentiment for the stock, which is up 30% in a month.

That said, the firm’s market-cap is only £774m, and it’s operating in a massive £250bn global market that’s growing due to the health and fitness boom.

I reckon the stock’s one to think about.

Should you invest £5,000 in Booking Holdings right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Booking Holdings made the list?

Ben McPoland owns shares in Applied Nutrition.

The post 2 top-notch stocks to consider buying for an ISA in July appeared first on The Twelfth Magpie.

It is possible to beat the market and generate higher returns than on offer from tracker funds though. Here’s how.

Letting winners run

If your goal is to beat the market, the single best thing you can do is let your winners run. Most professional fund managers are not able to fully do this.

You see, most fund managers are forced to trim their winners for risk management/compliance reasons. Typically, their compliance departments will stop them holding more than 5% of their portfolios in specific individual companies.

This limits their gains and negatively impacts their overall performance. Because they can never really truly benefit from big winners like Nvidia, which is up 185-fold over the last 10 years.

The good news is that retail investors don’t face these restrictions meaning that they can let their winners run and run. All you need is a few big winners, and market outperformance is very achievable.

Taking a long-term view

Another important strategy is to take a long-term view. This is where the big gains are generated — just look at Nvidia’s 10-year gains.

Again though, most pros can’t really do this. This is because they’re judged on their monthly, quarterly, and annual performances and can get fired if their performance is lousy.

As a result, they tend to be focused on trying to find stocks that will outperform in the short term. Consistently identifying short-term winners is very hard, however.

This is where retail investors have a massive edge over the pros. We don’t need to worry about short-term performance and can focus on long-term stock market winners.

Owning small-caps

Finally, another powerful market-beating strategy is to own some small-cap stocks. Occasionally, these stocks produce huge gains meaning that they can really boost overall portfolio performance.

An example here is Applied Nutrition (LSE: APN), a UK-listed protein and supplements company. Its share price is up about 38% in a month and 135% in a year (versus 0% and 18% for the FTSE 100 index).

It’s rising like this because the company is growing at a spectacular rate. This financial year (ending 31 July), its sales are expected to amount to around £150m versus £107m last year.

It has also seen gains as a result of an upward valuation re-rating – a year ago it was trading quite cheaply despite its growth. You often see this kind of disconnect between fundamentals and valuations in this small cap space because these stocks are not researched to the same degree as large-cap stocks are.

Now, the vast majority of fund managers can’t touch this kind of stock. It’s just too small at a market cap of £745m. They would end up owning too much of the company if they deployed capital into it.

Retail investors can though. This stock could be added to an ISA or SIPP to sit alongside blue-chip stocks or funds.

Personally, I think it’s worth a closer look (I own some shares myself). There are risks around competition and growth rates but with the forward-looking price-to-earnings (P/E) ratio in the low 20s, I see potential for further gains.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Edward Sheldon owns shares in Applied Nutrition and Nvidia

The post How on earth can retail investors beat the stock market when 90% of professional fund managers can’t? appeared first on The Twelfth Magpie.

Whether you’re a growth or income investor, it’s critical to ensure adequate diversification in an ISA. Only focusing on one area fails to appreciate how different stocks complement each other.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

So what’s the best way to plan an ISA portfolio?

The two-part ISA approach

A popular approach to balancing an ISA is to split it into two parts:

• Core holdings: reliable dividend payers, diversified funds, or investment trusts.
• Satellite holdings: a smaller allocation to faster-growing shares or sectors.

This gives the portfolio a balance between stability and upside. It also helps avoid the common mistake of building an ISA that is either too cautious or too speculative.

A few example stocks

Core holdings are ideally large-cap blue-chip companies that are well-established. Because of their bloated size, they tend to grow slower but are less volatile and usually offer stable income. 

Some of my favourite FTSE 100 core holdings include AstraZeneca, Unilever, HSBC, and National Grid.

Picking satellite holdings requires more care, as they’re typically riskier — but with higher reward potential. One that’s been rapidly rising up the ranks on my watchlist is Applied Nutrition (LSE: APN).

A key reason I like this FTSE 250 company is because I use its products, so I understand it well. That’s always a good place to start when choosing companies to invest in.

What I like about Applied Nutrition

While many larger UK companies have been stagnant this year, Applied Nutrition is up 133.4% since June 2025.

After a run like that, you’d expect analysts to be wary of further growth. But the majority of analysts still rate it a Buy, with an average 12-month price target of 322p. That’s 10% higher than today’s price.

The company just acquired US-based Nutrablend Group for $16m, a move that sent the price soaring 16% in early June. The deal is expected to deliver at least $30m in revenue by 2027.

So has most of the growth been priced in already? I don’t think so. Valuation is critical when hunting growth stocks, and while Applied’s is high, it’s still affordable considering the recent rally.

But the risks are still important to address. Acquisitions are pricey and if they don’t pan out as hoped, the financial impact can be significant. Plus, the company’s now more exposed to the US market, so any downturn there would hurt profits.

Still, with revenue growing rapidly and recent guidance upgraded, I think it’s a top stock to consider as a small part of a diversified portfolio.

Common mistakes to avoid in an ISA

When picking stocks for your balanced ISA portfolio, don’t fall foul to these errors:

• Chasing the highest yield without checking if it’s sustainable.
• Overly concentrating in one sector.
• Ignoring the risk of dividends being cut.
• Treating the ISA like a trading account rather than a long-term plan.

The bottom line

The best ISA strategy is often the simplest one. Build a core of quality holdings, add a little growth, and let tax-free compounding do the work.

For many investors, that’s a more realistic path to passive income than trying to pick the next big winner.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Mark Hartley owns shares in AstraZeneca, Unilever, HSBC, and National Grid.

The post Here’s how smart investors allocate their £20,000 Stocks and Shares ISA allowance appeared first on The Twelfth Magpie.

Since I bought the stock at 216p in mid-April, it has climbed to 281p, delivering a gain of 30%. And it’s up 35% in just the past month!

However, I have no desire to sell to make a quick buck. Instead, if the investment case remains intact, I intend to keep this holding for many years. Here’s why.

How does it make money?

Applied Nutrition formulates and creates premium sports nutrition supplements, including protein, creatine, pre-workout drinks, and energy gels. It also has a wellness range, selling collagen products and various vitamins and minerals.

Indeed, the firm sells over 120 products in more than 85 countries worldwide, including in high-street health retailers, gyms, supermarkets, and online. Approximately 91% of sales is business-to-business.

Due to this diverse product range, the brand appeals to bodybuilders, competitive athletes, and casual gym-goers, while nearly half of end customers are female.

One best-selling product is ABE (Europe’s most popular pre-workout brand). I have to say, ABE certainly adds an oomph to my workouts, but without causing a racing heart or sleep disruption like some poorly formulated alternatives.

Ahead of expectations

Following a strong first half driven by multiple product launches, the firm raised full-year guidance in February. About £140m in revenue was expected, up from the £133m that analysts previously had pencilled in.

On Monday (1 June), however, Applied Nutrition was back with an unscheduled trading notice. Due to continued sales momentum, it now expects revenue to be approximately £148m for the full year (ending July). That’s around 38% growth.

Additionally, the group announced the acquisition of Nutrablend, a US-based sports nutrition manufacturer for $16m (£12m). Its facility has an R&D design team, allowing the same vertically integrated model as Applied Nutrition’s UK operation.

This acquisition will provide a number of benefits:

• US production capacity of $300m in revenue per year
• Two newly acquired brands (Basic & GR8)
• Revenue opportunities from white label manufacturing
• Improved time to market with new prodcuts
• Lower freight, logistics, and import duty costs in North America
• Opportunity to cross-sell existing ranges to Nutrablend customers
• Earnings enhancing in FY27

Finally, the firm entered into a new licensing agreement with Mondelēz International to develop various sports nutrition products for North American markets. The range will be in 2,200 Walmart stores from August.

Demand across our markets shows no sign of abating and we are well positioned to deliver on what consumers need for their health and wellness journey.
CEO Thomas Ryder

Risks to monitor

Naturally, the firm faces a lot of competition, particularly in North America. And with UK inflation and unemployment ticking up, some consumers could struggle to afford premium supplements.

Another key risk here is some sort of quality control issue with the products, as this could damage trust in the brand.

Can it keep sprinting higher?

Overall though, I’m very bullish here, especially after the latest update. This is a profitable, founder-led company operating in a fast-growing global sports nutrition, health, and wellness market.

Despite the strong share price rally, the forward price-to-earnings multiple is 21.5. At this price, I think the stock’s still well worth considering as a long-term buy.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Ben McPoland owns shares in Applied Nutrition.

The post Up 35% in a month, can this fantastic FTSE 250 stock keep marching higher? appeared first on The Twelfth Magpie.

Is it worth considering for a Stocks and Shares ISA or SIPP? I believe so – here’s why.

A health and wellness powerhouse

Applied Nutrition is a leading maker of premium nutritional supplements (like protein powders, hydration drinks). A global operator, it sells its products both in stores (such as Holland & Barrett, Tesco) and online.

Now, I’ve covered this stock a few times in recent months and explained the bull case. In short, this company looks really well positioned to benefit from the growing focus on health, wellness, and nutrition (and the shift away from alcohol).

Exciting news this week

Since I last covered the stock, however, there has been some exciting news. Earlier this week, the company put out a trading update and raised its full-year revenue guidance.

In this update, it advised that it now expects revenue of £148m for the year ending 31 July versus previous guidance of £140m. That new target would represent year-on-year growth of 38%.

It noted that trading continues to be strong with continued momentum across the group. “Demand across our markets shows no sign of abating and we are well positioned to deliver on what consumers need for their health and wellness journey,” said founder and CEO Thomas Ryder.

It gets better though. In the update, the company also advised that it has acquired the trade and majority of assets of US-based Nutrablend Group for around £12m. As part of this deal, it will get a manufacturing and warehouse facility in the US.

This acquisition is going to offer many benefits for the group. Not only will it support production capacity of up to $300m of revenue per year in the US but it will also lower freight, logistics, and import duty costs in North America and enhance operational and supply chain resilience (reducing reliance on cross-border shipping).

On top of all this, Applied Nutrition announced that it has entered into a new licensing agreement with Mondelēz International for the development and manufacture of some branded sports nutrition products for the US and Canadian markets. The range will initially be stocked in 2,200 Walmart stores and 1,300 GNC corporate stores from August 2026.

So overall, it was a fantastic update. Not only was guidance raised but the company showed that it’s making some great operational moves.

Tipped to keep rising

Now, since the update, Applied Nutrition’s share price has moved higher. However, I don’t think it’s too late to consider getting involved here.

Looking at earnings forecasts for next financial year (starting August), the forward-looking price-to-earnings (P/E) ratio is only around 20. That’s not high given the level of revenue growth.

It’s worth noting that since the update, analysts at Deutsche Bank have raised their price target to 335p. That’s about 20% above the current share price so they clearly expect the stock to keep rising.

Of course, there are risks – a consumer spending slowdown is one scenario to think about. All things considered, however, I like the risk/reward set-up.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Edward Sheldon owns shares in Applied Nutrition

The post £1,000 buys 358 shares in this red-hot FTSE 250 stock that’s tipped to keep rising appeared first on The Twelfth Magpie.

Over 12 months, Applied Nutrition’s share price has more or less doubled in value (up 98.3%). Just today (1 June) it’s surged 7% thanks to another exceptional trading update.

Here I’m asking two things: why does the FTSE 250 firm continue to soar? And have investors like me missed the boat?

Picking up the pace

In its own words, Applied Nutrition was established to…

formulate and create premium nutrition supplements for professional athletes, fitness enthusiasts, the gym lifestyle community and people looking to supplement their diet with the highest quality health, wellbeing and beauty nutrition.

In an age when eating and living healthily are gaining importance with consumers, Applied Nutrition has unlocked a formula that’s delivering significant growth.

Sales had leapt 57% during July–January, prompting the firm to raise full-year sales forecasts to £140m. Applied Nutrition pumped up its revenues estimates again today, leading to that latest share price bump. Sales are now tipped at £148m.

What’s its secret?

As I say, the sports nutrition is an enormous global market. And it’s tipped to keep growing at breakneck speed. Grand View Research analysts expect it to swell at a compound annual growth rate of 8.7% between now and 2033, to $138.5bn.

So how is Applied Nutrition managing to thrive in what’s a highly competitive landscape? There are several reasons for its success, including:

• A broad product portfolio that targets a huge range of different consumers.
• Strong brand recognition, boosted by partnerships with top sports teams and athletes.
• Its diversified retail strategy covering supermarkets, health stores and discount retailers.
• A growing international presence (today it also announced the acquisition of US-based Nutrablend Group).

A FTSE 250 bargain?

I must repeat, Applied Nutrition operates in a hugely competitive market. That means future success is by no means guaranteed. Can sales also continue soaring as the cost-of-living crisis lasts in key markets? Despite its resilience so far, this is an added issue for investors to consider.

Yet City analysts are confident revenues and profits can keep surging. A 43% increase in annual earnings is tipped for this financial year ending July. Further rises of 11% are tipped for fiscal 2027 and 2028.

The question is, can Applied Nutrition’s share price keep climbing? I think so, given that the shares are still ‘cheap’. Forget about its forward price-to-earnings (P/E) ratio of 20.3 times, a reading I consider pretty reasonable. A P/E-to growth (PEG) ratio of just 0.5 suggests this is a bargain FTSE 250 share that’s worth serious consideration.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post How has this FTSE 250 share surged ANOTHER 7% today? appeared first on The Twelfth Magpie.

Here, I’m going to highlight a FTSE 250 share I’m excited about (I’ve recently been buying it for my ISA). In my view, this stock has the potential to outperform a lot of popular stocks (eg Rolls-Royce, Lloyds) in the next two years.

Small but mighty

The company is Applied Nutrition (LSE: APN), a leading maker of premium nutritional supplements (eg protein powders, hydration drinks).

At its current share price of £2.33, it has a market-cap of £583m. Give it a few years though, and I think we could potentially be looking at a £1bn valuation.

Why am I bullish?

As for why I’m bullish here, there are a number of reasons. One is that younger consumers are generally very health/fitness focused. These generations are spending less on alcohol and more on nutritional supplements, a trend that should support company growth in the years ahead.

Another is brand power. There are a lot of companies making nutritional supplements today (which is a risk) however, but where I think Applied Nutrition has an edge is that consumers recognise and trust the brand (there are, after all, some poor brands/products out there).

One thing helping the brand is the fact that the company’s products are sold at trusted retailers such as Tesco and Holland & Barrett. I’ll point out that I was in Holland & Barrett last week and Applied Nutrition’s products were occupying a lot of shelf space.

I’m also impressed with the range of products on offer. This isn’t just a whey protein company, today it offers everything from vitamins to sleep support supplements.

Strong financials

As for the company’s financials, they look fantastic. Over the last three financial years, revenue has climbed from £35m to £107m. This financial year (ending 31 July), the company is targeting £140m in revenue. That would represent growth of around 30%.

In terms of profitability, operating margins are in the high 20s. Meanwhile, return on capital employed is near 50%.

Turning to the balance sheet, this is robust. At the end of January, the company had £26m in cash and cash equivalents and no long-term debt.

How’s the valuation?

Zooming in on the valuation, it seems very reasonable to me. Looking at earnings forecasts for next financial year (starting August), the forward-looking price-to-earnings (P/E) ratio’s only 18.6.

At that multiple, I see the potential for share price gains if earnings continue to climb. We could even see some earnings multiple expansion.

I’m a buyer

In terms of risks, a slowdown in consumer spending is one. The fact that younger generations are finding it harder to get a job is an issue to think about. Competition from rivals is another. Other big brands here include Myprotein, PhD Nutrition, and Optimum Nutrition.

However, I like the risk/reward proposition. In my view, this stock’s worth considering as a growth play. As noted above, I’ve been buying it recently. And so has my colleague Ben McPoland.

Should you invest £5,000 in Applied Nutrition Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Applied Nutrition Plc made the list?

Edward Sheldon owns shares in Applied Nutrition

The post Prediction: this £2.33 FTSE 250 stock will outperform Rolls-Royce and Lloyds over the next 2 years appeared first on The Twelfth Magpie.

Therefore, it’s important to look past any hype to try and understand whether a company’s growth is sustainable.

Here, I want to highlight a growth share that I think could deliver market-beating performance over time.

Taking market share

Applied Nutrition (LSE:APN) is a FTSE 250 firm with tremendous momentum. The supplements powerhouse has made multiple upgrades to its FY26 guidance, resulting in current expectations for £140m in revenue (approximately 31% growth).

Sales are booming, with all geographies seeing an increase in sales during the six months to 31 January.

• UK: +46%
• Europe: +38%
• International: +75% (including 110% sales growth in Latin America)

The only region where things are looking a bit dodgy right now is the Middle East (volumes are under pressure for obvious reasons). This has the potential to put a dampener on things when full-year results arrive later this year.

However, taking a multi-year view, I’m very optimistic this company can become larger. One reason is that the global fitness and health market is very large but still growing, and Applied Nutrition is taking market share in it.

While we remain a relatively small player on a global scale, our opportunity to grow is vast, and we are well-placed to continue taking market share, supported by structural tailwinds across the sector and our expanding distribution, consistent innovation and increasing brand recognition.
Applied Nutrition

To put some numbers on this, the profitable firm’s revenue is expected to be around £140m this fiscal year. But we’re looking at a global sports nutrition, health, and wellness market that’s projected to grow at an annualised rate of 8.1% to reach £279bn by the end of 2028.

What’s the firm’s secret sauce?

Speaking as a gym-going customer (and now shareholder), I can attest to the company’s product quality. I buy its flagship ISO XP whey protein isolate, which is an ultra-filtered, premium protein powder. Unlike most others, this stuff dissolves incredibly smoothly without leaving lumps. It’s a top-tier product.

Meanwhile, Applied Nutrition also owns Europe’s best-selling pre-workout drink brand ABE (All Black Everything). This is in leading supermarkets here and abroad, including Walmart.

Founder and CEO Thomas Ryder says: “ABE [is] now…available to buy in Tesco. When I started in this industry, I couldn’t imagine that pre-workout would be on the shelves of a national grocer. It is a clear sign of how far the category has moved away from appealing only to a niche customer base and moving towards something mainstream.”

I believe the company’s competitive edge lies in its trusted brand, product innovation (new flavours, formulas, partnerships, etc), and ambitious founder-led management team. Its first out-licensing agreement was recently secured with Morrisons for a GLP-1 friendly range of meals.

Today, the global sports nutrition market is extremely fragmented, with lots of poor-quality products knocking about online. Over the next decade, Applied Nutrition has a chance to consolidate this market through constant innovation and quality, gaining the trust of both athletes and serious gym-goers, as well as a growing pool of health-conscious consumers.

With the stock trading at a reasonable 17 times next year’s forecast earnings, I reckon it’s worth considering as a buy-and-hold ISA investment.

Ben McPoland has positions in Applied Nutrition.

The post 1 top growth stock to consider buying for an ISA today appeared first on The Twelfth Magpie.

Admittedly, that sounds like a fish gasping for air. But GARP stocks can turn out to be savvy investments.

Here’s one I think is worth checking out today.

Applied Nutrition

Applied Nutrition (LSE:APN) sells over 120 nutrition supplements worldwide. At the rate I’m going, half of them will be on my kitchen worktop before too long!

That’s because I now buy the company’s creatine, protein, ‘Critical Greens’ (vegetable powder), and Test X (natural testosterone booster).

Oh, and after the firm sent me a free tester of its best-selling pre-workout drink, I’ll be buying that too. The Slush Puppie flavour makes it tolerable, while it certainly elevates a gym session, to put it midly.

Good job I’m a shareholder then! What made me invest? Trust and quality are key factors. In my experience, there’s a lot of rubbish supplements knocking about online, especially the cheaper stuff.

But Applied Nutrition aims to become “the world’s most trusted and innovative sports nutrition, health, and wellness brand“. So most of its products are formulated and manufactured at its state-of-the-art facility in Knowsley to keep a focus on quality.

Hence why it has secured shelf space in Tesco, Asda, Morrisons, Walmart, Holland & Barrett, and more, as well as selling on Amazon and its own app. New products such as creatine gummies and Sparkling Collagen Protein Water are selling well.

Everything we do is to resonate trust with the end consumer.
Applied Nutrition

Strong financial performance

In fiscal 25, which ended in July, the firm’s revenue jumped 24% to £107.1m. In the first half of fiscal 26, top-line growth accelerated 56.5% to £74.5m, setting the company up for strong 31% sales growth this year.

Alongside this, we have solid profits. In the first half, adjusted pre-tax profit surged 53.7% to £20.9m. The quality metrics are strong, with a 27.8% operating margin and high 51.7% return on capital.

Looking ahead, the company expects robust growth to continue as it enters new categories and international markets. For example, it’s moving deeper into the health and wellness space with brand ambassador (and major shareholder) Coleen Rooney.

Together, they offer products to boost collagen, sleep, immunity, and to debloat. And this helps explain why 45% of Applied Nutrition’s customers are female.

This company is far from simply a protein maker for weight-lifting meatheads!

Valuation

Turning to valuation, this is very much in GARP territory, in my opinion. We’re looking at a forward price-to-earnings (P/E) multiple of 17.7 and a price/earnings-to-growth (PEG) ratio of 1.3.

Normally, when a company is growing revenue and earnings this quickly, I would expect those figures to be higher. That’s why I’ve been buying this stock for my own portfolio recently.

Final thoughts

The stock isn’t perfect, of course. While health and fitness is a growing global market, there’s also a lot of competition. And rising inflation could put pressure on margins (extra freight costs, whey protein, etc).

On balance, though, this looks like an excellent growth stock to me. I think it’s well worth considering long term.

The post 1 top UK growth stock to consider buying in May appeared first on The Twelfth Magpie.

Now, Diageo shares could rebound in time, enabling investors to make up their losses. However, it’s worth remembering that when it comes to making up losses in the stock market, we don’t have to do it with the same stocks we lost the money on.

Growing while Diageo’s shrinking

This brings me to FTSE 250 stock Applied Nutrition (LSE: APN). It’s a leading supplier of nutritional supplements.

I think this stock could be a good way to try and make up losses from Diageo. Because the way I see it, this company’s pretty much the direct opposite.

Whereas Diageo sells booze, which is seeing a decline in sales as younger generations and those on weight-loss drugs drink less, Applied Nutrition sells protein powders and hydration solutions, which are booming as consumers spend their money on products designed to make them feel healthy and look good (social media’s helping to drive this theme).

So unlike Diageo, it’s positioned in a consumer goods industry that’s expanding rapidly (the company expects its markets to grow by around 8% a year between now and 2028).

“As health and wellness becomes increasingly embedded in everyday consumer behaviour, we continue to benefit from a larger pool of individuals embarking on, or continuing, their wellness journey.”

Applied Nutrition Founder and CEO Thomas Ryder

We can see this in its sales and share price. For the six-month period ended 31 January, Applied Nutrition’s sales rose 57% year on year (Diageo reported net sales growth of -4% for the six-month period ended 31 December), while over a year, its share price is up about 90% (versus -30% for Diageo, as noted above).

Strong financials and a low valuation

Looking beyond the favourable thematic backdrop and the incredible level of revenue growth, there are a number of things to like about Applied Nutrition from an investment perspective. One is the valuation.

With analysts expecting earnings per share of 12.5p for the year starting 1 August, the forward-looking price-to-earnings (P/E) ratio’s only 17.5. That’s low considering the level of top-line growth.

Another thing to like is the financials. Not only does the company have a very strong balance sheet (at the end of January it had a net cash position of £25.4m) but it also has a very high return on capital – last year it was 49%.

The company’s also trusted, which is important, because it operates in a competitive industry in which there are many different brands (and competition from rivals is a risk).

Finally, it has a very effective business-to-business (B2B) model, selling its goods through established retailers such as Tesco, Asda, and Amazon. This is a cost effective way to gain access to a broad range of customers and expand into new geographic markets and it should help the company scale up over time.

Overall, there’s a lot to like. While competition and consumer spending weakness are risks, I think this stock has all the right ingredients to be an excellent long-term investment and is worth considering for an ISA or Self-Invested Personal Pension (SIPP).

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